As first reported in a Breaking News Alert on Friday, Top 40 supplier alphabroder (asi/34063) has completed a deal to merge with fellow Top 40 supplier Bodek and Rhodes (asi/40788). Financial terms of the deal were not released, but the transaction brings together two suppliers that are ranked number one and number seven on Counselor’s 2015 Top 40 list. Combined, the two companies’ annual North American ad specialty sales will surpass $1 billion.
“We have been respectful competitors and we’ve always admired the Bodek and Rhodes business from afar,” said Norm Hullinger, CEO of alphabroder, in an exclusive joint interview along with Mike Rhodes, CEO of Bodek and Rhodes. “This deal was entirely driven from a customer perspective, and now we’ll both be able to offer more product choices, deeper inventory, and even higher levels of service.”
Following the transaction, the companies will maintain separate ASI numbers and identities, and Bodek and Rhodes will have a distinct website and customer-facing operation. Mike Rhodes, CEO of Bodek and Rhodes, will now serve on the board of directors of the combined company, and he and members of his family will continue as owners in the newly-formed organization.
“We really like the management team at alphabroder and working with them to complete this deal has been a great process,” said Rhodes. “We’ve been competing with them for 75 years, but there has always been a mutual respect. Combined, there will be a great product offering. We’ll have 68 brands to offer the market from the two companies.”
This is the third major addition for alphabroder in the last few years, after it added Imprints Wholesale in 2012 and Ash City Worldwide in 2014. "This transaction further advances the transformation of alphabroder,” said David Simon, managing director of private investment firm Littlejohn & Co., alphabroder’s largest shareholder, in a statement. “The significant new equity investment in support of the Bodek transaction continues our commitment to drive value creation at the company. We continue to see many ways to create value at alphabroder and expect to pursue additional opportunities, as they become available, in order to enhance the company's position in the broader promotional products marketplace."
Hullinger also told Counselor that alphabroder expects to evaluate further acquisition opportunities as they become available. “We’ll catch our breath after this one, but we’ll certainly talk about ways to grow the business – both organically and through acquisition,” Hullinger said. “You haven’t heard the last of us. We’ll continue to evaluate potential acquisitions.”
Alphabroder, the largest supplier in the industry, reported total North American ad specialty sales of $815 million last year. Bodek and Rhodes reported its 2014 North American ad specialty sales as $254.1 million, an 8% increase from the previous year.